DESCRIPTION (Applicant's Description): Our long-term studies of first episode schizophrenia patients have clearly indicated excellent initial responsiveness of positive psychotic symptoms to treatment with conventional antipsychotic medications. However, in the years immediately following this initial good response, morbidity increases: cognitive functioning improves with treatment but remains impaired in multiple domains, social/occupational adjustment is poor or worse for 25% of the patients, 15% develop a deficit state and the incidence of tardive dyskinesia is 6% per year of conventional antipsychotic exposure. Relapses, often multipl ones, are the rule and are usually precipitated by medication noncompliance. Prevention of this morbidity is the major clinical challenge in treating first episode patients and is the focus of this application. There is some evidence that the second generation antipsychotic drugs may have superior efficacy in terms of these outcome domains. However, these newer agents have been studied primarily in chronic and/or treatment resistant patient samples and there are virtually no long term studies or studies comparing the new drugs with one another. We propose to study them in the population that has the potential for maximum responsiveness and long-term benefit-patients with schizophrenia who are being treated for the first time. Specifically, we will randomly assign first episode patients to treatment with olanzapine, risperidone or ziprasidone. Treatment will be for 3 years. Outcome measures for the initial episode will include psychopathology (positive, negative and affective symptoms), side effects, neurocognition (executive function, memory and attention), social and occupational function and service utilization. The effects on long term course will be measured in terms of frequency and timing of relapses, level of recovery from subsequent episodes and prospectively assessed course of psychopathology, neurocognitive function, social/vocational function and service utilization. The results will provide a basis for informed treatment choices for clinicians as well as address the crucial question of the potential of the new treatments to improve the longitudinal course of this devastating illness.